Hogageddon forced up food inflation in China last month
as pork prices surged by 46.7% on the back of an African swine fever epidemic
in the world’s second-largest economy.

The year-on-year jump illustrated the depth of the
problem after millions of pigs were slaughtered, or died, from the outbreak.

Data from the National Bureau of Statistics showed that
the cost of food in the official Consumer Price Index, or CPI, jumped by 10% in
August compared to the same period last year.

Significantly, that was the highest level in more than
seven years.

“Consumer price inflation should accelerate in the coming
months as pig stocks continue to fall,” Julian Evans-Pritchard and Martin
Rasmussen, economists with Capital Economics, wrote in a note released on
Tuesday.

The knock-on effect also hit beef, mutton and chicken
prices, which soared by between 11.6% and 12.5% last month compared to the same
period in 2018. Unseasonal weather continued to play havoc with fresh fruit
prices, which increased by 24% year-on-year, although it was down from July’s
39% rise.

“But the upcoming [reserve requirement ratio] cuts
announced last Friday are in line with our view that rampant food price
inflation is not a barrier to monetary easing, and we continue to anticipate
further loosening in the next few quarters,” Evans-Pritchard and Rasmussen
said.

They were referring to the decision last week by the
People’s Bank of China to reduce the amount of funds banks have to hold in
reserve in a move to stimulate the economy as the trade war with the United
States drags on.

Still, it was the rise in pork prices which have grabbed
the headlines during the past three months.

Up to 200 million pigs could die, or be culled, in China
this year after contracting African swine fever. If that happens, pork prices
could soar by 70%, according to a senior Chinese official who declined to be
named.